[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Notices]
[Pages 26969-26971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10872]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1615-NC]
Medicare Program; Request for an Exception to the Prohibition on
Expansion of Facility Capacity Under the Hospital Ownership and Rural
Provider Exceptions to the Physician Self-Referral Prohibition
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
[[Page 26970]]
ACTION: Notice with comment period.
-----------------------------------------------------------------------
SUMMARY: Under section 1877(i) of the Social Security Act (the Act), a
physician-owned hospital is effectively prohibited from expanding
facility capacity, unless the Secretary grants the hospital's request
for an exception to that prohibition after considering input on the
hospital's request from individuals and entities in the community where
the hospital is located. The Centers for Medicare & Medicaid Services
(CMS) has received a request from a physician-owned hospital for an
exception to the prohibition against expansion of facility capacity.
This notice solicits comments on the request from individuals and
entities in the community in which the physician-owned hospital is
located. Community input may inform our determination regarding whether
the requesting hospital qualifies for an exception to the prohibition
against expansion of facility capacity.
DATES: Comment Date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on June 11, 2014.
ADDRESSES: In commenting, please refer to file code CMS-1615-NC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of three ways (please choose only
one of the ways listed):
1. Electronically. You may submit electronic comments on this
exception request to http://www.regulations.gov. Follow the
instructions under the ``More Search Options'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1615-NC, P.O. Box 8010,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Department of Health and Human Services,
Attention: CMS-1615-NC, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Patricia Taft, (410) 786-4561 or
Teresa Walden, (410) 786-3755.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments:
All comments received before the close of the comment period are
available for viewing by the public, including any personally
identifiable or confidential business information that is included in a
comment. We post all comments received before the close of the comment
period on the following Web site as soon as possible after they have
been received: http://www.regulations.gov. Follow the search
instructions on that Web site to view public comments.
We will allow stakeholders 30 days from the date of this notice to
submit written comments. Comments received timely will be available for
public inspection as they are received, generally beginning
approximately 3 weeks after publication of this notice, at the
headquarters of the Centers for Medicare & Medicaid Services, 7500
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view
public comments, please phone 1-800-743-3951.
I. Background
Section 1877 of the Social Security Act (the Act), also known as
the physician self-referral law--(1) prohibits a physician from making
referrals for certain ``designated health services'' (DHS) payable by
Medicare to an entity with which he or she (or an immediate family
member) has a financial relationship (ownership or compensation),
unless an exception applies; and (2) prohibits the entity from filing
claims with Medicare (or billing another individual, entity, or third
party payer) for those DHS furnished as a result of a prohibited
referral.
Section 1877(d)(3) of the Act provides an exception, known as the
``whole hospital exception,'' for physician ownership or investment
interests held in a hospital located outside of Puerto Rico, provided
that the referring physician is authorized to perform services at the
hospital and the ownership or investment interest is in the hospital
itself (and not merely in a subdivision of the hospital).
Section 1877(d)(2) of the Act provides an exception for physician
ownership or investment interests in rural providers (the ``rural
provider exception''). In order for an entity to qualify for the rural
provider exception, the DHS must be furnished in a rural area (as
defined in section 1886(d)(2) of the Act) and substantially all the DHS
furnished by the entity must be furnished to individuals residing in a
rural area.
Section 6001(a)(3) of the Patient Protection and Affordable Care
Act (Pub. L. 111-148) as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) (hereafter referred to
together as ``the Affordable Care Act'') amended the whole hospital and
rural provider exceptions to the physician self-referral prohibition to
impose additional restrictions on physician ownership and investment in
hospitals and rural providers. Since March 23, 2010, a physician-owned
hospital that seeks to avail itself of either exception is prohibited
from expanding facility capacity unless it qualifies as an ``applicable
hospital'' or ``high Medicaid facility'' (as defined in sections
1877(i)(3)(E), (F) of the Act and 42 CFR 411.362(c)(2), (3) of our
regulations) and has been granted an exception to the prohibition by
the Secretary. Section 1877(i)(3)(A)(ii) of the Act provides that
individuals and entities in the community in which the provider
requesting the exception is located must have an opportunity to provide
input with respect to the provider's application for the exception. For
further information, visit our Web site at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html.
II. Exception Request Process
On November 30, 2011, we published a final rule in the Federal
Register (76 FR 74122, 74517 through 74525) that, among other things,
finalized Sec. 411.362(c), which specified the process for submitting,
commenting on, and reviewing a request for an exception to the
prohibition on expansion of facility capacity. We specified that prior
to our review of the request, we will solicit community input on the
request for an exception by publishing a notice of the request in the
Federal Register (see Sec. 411.362(c)(5)). We also stated that
individuals and entities in the hospital's community have 30 days to
submit comments on the request. Community input must take the form of
written comments and may include documentation demonstrating that the
physician-owned hospital requesting the exception does or does not
qualify as an ``applicable hospital'' or ``high Medicaid facility,'' as
such terms are defined in Sec. 411.362(c)(2) and (3). Although we gave
examples of community input, such as documentation demonstrating that
the hospital does not satisfy one or more of the data criteria or that
the hospital discriminates against beneficiaries of Federal health
programs, we noted that
[[Page 26971]]
these were examples only and that we will not restrict the type of
community input that may be submitted (76 FR 74522). If we receive
timely comments from the community, we will notify the hospital, and
the hospital has 30 days after such notice to submit a rebuttal
statement (Sec. 411.362(c)(5)(ii)).
A request for an exception to the facility expansion prohibition is
considered complete and ready for CMS review if no comments from the
community are received by the close of the 30-day comment period. If we
receive timely comments from the community, we consider the request to
be complete 30 days after the hospital is notified of the comments. If
we grant the request for an exception to the prohibition on expansion
of facility capacity, the expansion may occur only in facilities on the
hospital's main campus and may not result in the number of operating
rooms, procedure rooms, and beds for which the hospital is licensed
exceeding 200 percent of the hospital's baseline number of operating
rooms, procedure rooms, and beds (Sec. 411.362(c)(6)). Our decision to
grant or deny a hospital's request for an exception to the prohibition
on expansion of facility capacity will be published in the Federal
Register in accordance with our regulations at Sec. 411.362(c)(7).
III. Hospital Exception Request
As permitted by section 1877(i)(3) of the Act and our regulations
at Sec. 411.362(c), the following physician-owned hospital has
requested an exception to the prohibition on expansion of facility
capacity:
Name of Facility: Lake Pointe Medical Center
Location: 6800 Scenic Drive, Rowlett, Texas 75088-4552 (Rockwall
County)
Basis for Exception Request: High Medicaid Facility
We seek comments on this request from individuals and entities in
the community in which the hospital is located. We encourage interested
parties to review the hospital's request, which is posted on the CMS
Web site at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html. We especially
welcome comments regarding whether the hospital qualifies as a ``high
Medicaid facility.'' Under Sec. 411.362(c)(3), a ``high Medicaid
facility'' is a hospital that satisfies all of the following criteria:
The hospital is not the sole hospital in the county in
which it is located;
The hospital does not discriminate against beneficiaries
of Federal health care programs and does not permit physicians
practicing at the hospital to discriminate against such beneficiaries;
and
With respect to each of the 3 most recent fiscal years for
which data are available as of the date the hospital submits its
request, the hospital has an annual percent of total inpatient
admissions under Medicaid that is estimated to be greater than such
percent with respect to such admissions for any other hospital located
in the county in which the hospital is located.
We note that our regulations require the requesting hospital to use
filed hospital cost report discharge data to estimate its annual
percentage of total inpatient admissions under Medicaid and the annual
percentages of total inpatient admissions under Medicaid for every
other hospital located in the county in which the hospital is located.
Individuals and entities wishing to submit comments on the
hospital's request should review the DATES and ADDRESSES sections above
and state whether or not they are in the community in which the
hospital is located.
IV. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
V. Response to Public Comments
We will consider all comments we receive by the date and time
specified in the DATES section of this preamble, and, when we proceed
with a subsequent document, we will respond to the comments in the
preamble to that document.
Dated: May 6, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2014-10872 Filed 5-9-14; 8:45 am]
BILLING CODE P